China’s central bank, which issued a new 100 yuan bill on Nov 12, has been transporting ever-increasing quantities of renminbi to foreign countries via Hong Kong to meet a growing demand for the currency.
The People’s Bank of China transported 50 billion yuan ($7.85 billion) in cash to Hong Kong, the country’s offshore RMB center, during the first nine months of this year, an increase of more than 46 percent year-on-year, according to Zhang Jianjun, director of the central bank’s sub-central branch in Shenzhen, Guangdong province.
“From 2004 to 2007, we shipped less than 5 billion yuan cash to Hong Kong every year. We transported about 27 billion yuan in cash annually since the demand for RMB cash surged in 2008,” said Zhang, whose organization is responsible for 83 percent of China’s cross-border RMB cash transportation.
In 2007, the central bank launched the first offshore RMB cash storage in Hong Kong managed by Bank of China, which provides cash and flow-back services for overseas markets. So far, 221 foreign banks from 19 countries in Asia, North America, Europe, Oceania and Africa have opened cash accounts with RMB clearing banks in Hong Kong.
RMB cash mainly crosses borders in one of two ways: carried by individuals or transported by commercial banks.
Chinese commercial banks in border areas cooperate with banks in neighboring countries on cash transportation, based on the bilateral local currency settlement agreements for border trade.
“The increasing use of RMB cash in offshore markets will promote outbound tourism and business, as well as strengthen confidence of RMB internationalization among overseas investors,” said Lo Pingwa, head of the bankwide operation department of Bank of China in Hong Kong.
The new optical features of the 2015 version of the 100 yuan bill are designed to improve protection against counterfeiting.